A senior Baltimore City employee, accused of defrauding a pandemic relief program of nearly $2.8 million, pleaded not guilty in U.S. District Court today.

The plea by Kara A. DiPietro, operations chief of the city’s Fleet Management division, came during her arraignment on six counts of bank fraud related to her applications for federal Paycheck Protection Program (PPP) loans in 2020 and 2021 while owning a millworking business in Columbia and a microloan company in Baltimore.

Among other things, the indictment charges that she submitted phony Employer Identification Numbers (EINs) on PPP applications never assigned by the IRS.

She also failed to disclose prior PPP applications, as required by the program. And she falsely certified that the companies she controlled had not received multiple draws from the same funding source.

If convicted, DiPietro faces a maximum of 30 years in prison and a $1 million fine.

DiPietro was not under court restrictions following her October 8 indictment by a federal grand jury. Today she agreed to surrender her U.S. passport, not open any new bank accounts and report regularly to a court officer.

Assistant U.S. Attorney Joseph Wenner said the government would not seek her detention before a yet-unscheduled trial.

Based on her financial affidavit attesting to financial hardship, U.S. Magistrate Judge Chelsea Crawford assigned a federal public defender to her case.

Last week, The Brew desdcribed DiPietro’s history of legal disputes with creditors and lenders independent of the PPP program. They included a $400,00 loan from the State Employees’ Credit Union of Maryland (SECU), a $500,000 loan from Howard County Economic Development Authority, and multiple loans from a company controlled by Joseph LaForte, a Philadelphia gangster, who threatened her and her family, leading to her role as a government witness.

Altogether, creditors claimed that she and her companies, Holdings Management Co., HMC Inc. (also known as H.M.C. Inc.) and Kinetic Capital LLC  left them with over $18 million in unpaid invoices and loans that defaulted.

After filing for personal bankruptcy and Chapter 7 liquidation of her companies, DiPietro was hired in April 2025 by the Baltimore Department of General Services as the $130,000-a-year deputy chief of Fleet Management, responsible for the city’s municipal fleet of 5,600 vehicles and repair yards.

Travel Approved, Then Canceled

Although indicted by the federal grand jury, she has continued in that job and was slated to attend a transit mobility conference in San Antonio, Texas, this week.

After The Brew disclosed her $2,547 travel submission – approved by Mayor Brandon Scott and the Board of Estimates last Wednesday – the mayor’s press office issued a statement that “Ms. DiPietro is no longer attending the conference in San Antonio.”

Asked today if DiPietro still works for the city and whether she has been placed on paid (or unpaid) administrative leave, the mayor’s office declined to answer, saying it “will not comment on personnel matters at this time.”

Asked how she gained employment in an operation with a $96 million annual budget given her checkered past, senior staff at DGS have not responded. Every city department is required by the Administrative Manual to run a background criminal check on potential employees.

At today’s arraignment, DiPietro, 49, acknowledged that she understood the charges against her, entered a not guilty plea and requested a jury trial.

According to the 11-page indictment, Kara DiPetro “knowingly and willfully executed fraud” on First Home Bank of Tampa, Fla., Sandy Spring Bank of Olney, Md. (now Atlantic Union Bankshares), Customers Bank of West Reading, Pa., and the Greater Nevada Credit Union.

She sought $7.5 million from those four institutions and wound up with $2.8 million in PPP loans for her companies.

Brew Stories

• Indicted Baltimore City official continues to work at high-level government job (10/20/26)

• Baltimore’a indicted Fleet Management chief is quietly allowed to travel to Texas conference (10/21/26)